Hiltzik: Disney World lawyers shrewdly outmaneuver DeSantis

A man in a suit and tie stands at a lectern with a crowd behind him.

By Michael HiltzikBusiness Columnist

March 30, 2023 8:04 AM PT

Did you really believe that Florida’s arrogant Gov. Ron DeSantis would get the better of Walt Disney Co. in their fight over Disney’s supposed “wokeness”?

If so, you don’t know your Disney.

DeSantis handpicked a board of cronies to take over control of Reedy Creek Improvement District — the quasi-governmental entity that Disney and Florida established more than 55 years ago to control development and management of the land on which Walt Disney World, Epcot and the company’s related enterprises sit.

There’s not a lot to suggest that the legal team assembled by one of the most powerful entities on the planet...[threw] together a slapdash agreement.

— Joe Patrice, former corporate litigator and ‘Above the Law’ blogger

DeSantis’ board has now revealed that, while they were snoozing, Disney executed an agreement with their predecessors that strips the new board of all its powers except the authority to “maintain the roads and maintain basic infrastructure,” according to one of the new board members.

Hilariously, the agreement Disney reached will remain in effect at least until 21 years “after the death of the last survivor of the descendants of King Charles III, King of England,” currently living. More on this delicious provision in a moment. First, let’s get a legal commentator’s opinion of where the Disney-DeSantis battle stands.

“DeSantis may well try to toss legally executed agreements in the rubbish,” former corporate litigator Joe Patrice wrote on his blog “Above the Law,” “but there’s not a lot to suggest that the legal team assembled by one of the most powerful entities on the planet... [threw] together a slapdash agreement.”

Now let’s review some of the history.

DeSantis threw a conniption last year when then-Disney Chief Executive Bob Chapek impudently expressed disapproval of the Republican governor’s latest effort to pander to his far-right base, the “Don’t Say Gay” law aimed at suppressing classroom discussions of gender issues.

He retaliated by revoking Disney’s near-dictatorial control over the 43-square-mile Reedy Creek district outside Orlando, Fla.

Creation of the district was a deal that Florida’s then-Republican governor, Claude Kirk, signed into law in 1967.

Disney’s goal was to avoid the honky-tonk-like development around Disneyland in Anaheim. It certainly succeeded, as anyone who has visited the perfectly coiffed banlieues of Walt Disney World can see.

The Reedy Creek district was nominally run by a board of Disney-connected nominees, but all its administrative power rested in the hands of its landowners, who are all pretty much the Walt Disney Co.

The text tying Disney's fate to the longevity of the British royal family

It’s proper to say that the district represented a giveaway of government authority to a major corporation, but the time to make that case was 1967, on the grounds of the public interest — not now, when it’s all about polishing DeSantis’ cred for Republican primary voters in Iowa.

The Florida Legislature got around to finalizing the takeover of Reedy Creek in February. DeSantis promptly appointed a board for the newly established Central Florida Tourism Oversight District consisting of Republican and conservative stooges, including a founder of the right-wing censorship-happy organization Moms for Liberty, who happens to be an architect of the “Don’t Say Gay” law and the wife of the chairman of the Florida Republican Party.

“There’s a new sheriff in town,” DeSantis declared, just a teensy bit prematurely, when he signed the takeover bill.

Here’s the rub. Days before the takeover, Disney reached a development agreement with the old Reedy Creek board while it was still in power. The agreement prohibits the newly constituted district from using the name “Disney” or its trademarks — specifically including Mickey Mouse — in any way without the company’s written permission. The agreement also leaves the new board without the ability to make design changes to buildings or constructing new ones without Disney’s permission.

The new board members knew nothing about the agreement until they took office. They disclosed their quandary Wednesday, at their first public meeting. Whether the agreement will stand up is unclear. To find an answer, the new board hired not one, not two, not three, but four law firms, including one whose lawyers will bill $795 an hour.

Now, what about this King Charles III bit? Charles is the guy who succeeded his mother, Elizabeth II, to the throne last year. His youngest descendant at this moment is Lilibet Diana Mountbatten-Windsor, Princess of Sussex, who is 21 months old, so you do the math. (She’s the daughter of Prince Harry and his wife, Meghan.)

The clause was written into the agreement as a backup to the provision that it is supposed to run forever. That might violate a legal principle known as the rule against perpetuities, a question on which, I gather, is a fixture on bar exams the world over. If you’d like to know how the rule can function as a fictional device, I recommend that you screen the 1981 William Hurt/Kathleen Turner film “Body Heat” — coincidentally set in Florida — in which (spoiler alert) it’s a key plot point.

Using the British royal family as a touchstone for the term of a trust became a tradition in the 19th century, when the typical life span ran to the 30s or 40s except for royals, who were presumed to receive healthcare that kept them alive longer. Also, royal families were the only ones that kept accurate and detailed genealogical records, so tracing descendants was relatively easy.

All this has reduced the DeSantis camp to fulminating powerlessly. The governor’s office called Disney’s move a “last-ditch” effort that may have “significant legal infirmities” that would render it “void as a matter of law.” Disney says all T’s were crossed and I’s dotted in accordance with the law.

Who’s got the upper hand? A multinational corporation intent on protecting franchises that bring it more than $80 billion a year has thus far made its adversary look like a blustering nincompoop.

DeSantis 0, Disney everything else.